Gandhinagar: The Government of Gujarat has today released the second statement and claimed that ‘Revocation of GR dated 1.12.2018 by Govt. of Gujarat in the consumers’ interest’.

The full text of the statement is following:

On Govt. of Gujarat vide Government Resolution (GR) dated 12.06.2020 has revoked its earlier GR dated 1.12.2018 considering the subsequent developments, changed market trend of Indonesian coal price and in order to safeguard the interest of consumers.

GR dated 1.12.2018 was resolved for three imported coal based Projects located in the state of Gujarat for which earlier four PPAs were executed. Supplemental PPA with Coastal Gujarat Power Ltd has not been signed due to lack of consensus amongst other Procurer States. In case of Essar Power Gujarat Ltd., Gujarat Electricity Regulatory Commission has approved the Supplemental PPA with certain modifications which has been challenged by Essar before Appellate Tribunal and thus Supplemental PPA has not materialized. As regard to Supplemental PPA with Adani Power, GUVNL has filed a Recall petition before Central Electricity Regulatory Commission (CERC) as Adani has violated the fundamental condition of GR dated 1.12.2018 regarding absorption of past losses by Project Developers, which is sub-judice. Therefore, none of the project developers are entitled to avail benefit under G.R. dated 1.12.2018.

Govt. of Gujarat has revoked its earlier GR dated 1.12.2018 and issued new guidelines dated 12.06.2020 in the consumers’ interest taking into consideration the changes in the market trend of Indonesian coal price post 2018 wherein other Market Index of repute have been included for computation of coal price. This will ensure procurement of coal by Project Developers in competitive manner at lowest possible rates and the benefit of reduced coal price from time to time would be passed on to the consumers.

In the new guidelines issued by Govt. of Gujarat, the modifications suggested by Gujarat Electricity Regulatory Commission in the matter of Supplemental PPA with Essar Power for considering superior operational parameters, disallowance of Transit Loss and Other Charges (3%) have been incorporated which will reduce the tariff as compared to GR dated 1.12.2018 and benefit the consumers of State. Under this new mechanism, in addition to consideration of superior operational parameters as stated above, Project Developers are required to procure coal in prudent and transparent manner through competitive bidding which will enable reduction in Tariff and the consumers of the State would be benefited through availability of power at reasonable rates for balance PPA tenure of around 15 years.

As per the new guidelines, the estimated Tariff for Supplemental PPA under implementation is reducing by around 30 paise/unit at June-2020 price level which is noteworthy reduction as compared to Tariff under GR dated 1.12.2018.

Moreover, as per the guidelines, ceiling of Indonesian Coal Index (HBA) has been reduced from USD 110/ MT to USD 90/ MT while the provision of automatic reset of Ceiling Price every 5 years has been removed. Any review in Ceiling Price would be only after approval of Electricity Regulatory Commission. Further, the provision related to reduction in Fixed Cost, Sharing of Mining Profit by Project Developers, option of extending PPA tenure by GUVNL etc. which are beneficial to consumers have been retained.

Thus, as per the new guidelines, the tariff payable is lower than tariff as per G.R. dated 1.12.2018 and also works out lower than present tariff as per original PPA at current coal price. Therefore, the reduction of imported coal price under the new guidelines will benefit the consumers of the State.

Govt. of Gujarat in the interest of consumers and for ensuring availability of power at economical rates has revoked the G.R. dated 1.12.2018 and issued new Guidelines dated 12.06.2020.